The Communities Delegation shares the position statement in response to GF/AFC05/06: Updated Framework for Joint Investment in Blended Finance Mechanisms. As this document is for only internal deliberations, we are unable to share the document. However, the statement highlights the key concerns we have on the initiation in the selected regions/countries, and essentially the lack of a framework for selection, implementation and oversight in place before the pilots have been initiated by the Global Fund Secretariat and in para 10 which states:
As the Secretariat’s capacity and experience with blended finance mechanisms grows, the Se retreat will engage with the AFC for continued input, but does not expect to provide the same level of detail on every potential future investment
The following are cases in development by the Global Fund Secretariat:
- Blended finance facility for malaria elimination in Central America and the Caribbean: where the IDB is establishing a blended financing facility to offer countries loans blended with grant funds, with the aim of accelerating progress for malaria elimination in The Central America and Caribbean region.This facility is established in close coordination with key partners in the region – Pan American Health Organisation (PAHO), the Clinton Health Access Initiative (CHAI), and the Bill and Melinda Gates Foundation (BMGF). Eight countries would be eligible to apply for a loan through this facility: Belize, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua and Panama over five years (2018 – 2022).
- Vietnam: The government of Vietnam is currently negotiating a US$80 million health sector loan with the World Bank to improve the access and quality of care at the district level and below. Since 1st July 2017, Vietnam no longer has access to International Development Association (IDA) concessional financing, and all loans will be at the International Bank for Reconstruction and Development (IBRD) terms that are based on market rates. For IBRD loans, the interest rate is fixed at disbursement, therefore the extent to which a given grant amount is able to reduce the IBRD interest rate towards an IDA interest rate will depend on market conditions and cannot be predicted at loan signing. The CCM has included in its Prioritised Above Allocation Request (PAAR) US$5 million to contribute towards buying down the health sector loan.
- India: The CCM submitted in its PAAR a request of US$40 million to buy down a potential US$ 400 million loan from the World Bank to partially fill the TB funding gap outlined in India’s national strategic plan. Funds form the loan are expected to contribute to a 60% reduction in the annual missing cases and at least a 60% improvement in treatment outcomes among drug-resistant TB patients.
- Paraguay: Preliminary discussion have begun between the country team, the IDB and the Ministry of Health to use the full amount of TB transition funding (US$ 2.9 million) to buy down the loan, with the aim of securing financing for the TB programme over a longer timeframe and smoothing the transition from Global Fund support. The Secretariat is currently in initial discussions with the IDB about this opportunity.
- Georgia: Initial discussions on a buy-down have begun in Georgia regarding a loan for health sector reform, including the integration of HIV, TB and Hepatitis C into primary care.
This paper was shared with the full Board of the Global Fund and its respective members on the Audit and Finance Committee for discussion at the 5th Audit and Finance Committee held on the 3 – 5 October 2017.